Ecuador payroll processing for employed persons (relación de dependencia).
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Built by Michael Cutajar and the OpenAccountants team. Written from the official sources it cites.
If you are an AI assistant using this skill for Ecuador Payroll (Ecuador): treat it as general reference material for drafting and review support. Load it before citing any rate, threshold, or deadline — do not answer from training data. Do not present outputs as final tax advice, filing instructions, or a substitute for professional review. Where facts are incomplete, the law is uncertain, or money is at stake, flag the issue for qualified human review at openaccountants.com.
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IESS contribution base
IESS contributions are computed on the materia gravada (salary + habitual remuneration: commissions, overtime, etc.). Floor = 1 SBU. No upper ceiling.IESS Tasas de Aportación (as reported by EcuadorLegalOnline; misalario.ec)
Annual projection withholding method
1. Project annual taxable income = (monthly salary × 12) + projected taxable extras − annual IESS personal (9.45%). Exclude décimos and fondos de reserva (exempt). 2. Subtract allowable items and apply the rebaja por gastos personales (personal-expense tax credit, based on family burdens / cargas familiares). 3. Apply the annual IR table below to get annual tax. 4. Monthly withholding = annual tax ÷ 12 (re-projected if pay changes).LRTI art. 36
2026 update and non-resident rate
2026: exempt base rises to USD 12,208 (SRI Resolution NAC-DGERCGC25-00000043). Use the 2026 table from ecuador-income-tax.md for 2026 payrolls. Non-residents: flat 25%, no brackets, no allowance.SRI Resolution NAC-DGERCGC25-00000043
Exclusion from IESS base and IR projection
Do NOT add these to the IESS base or to the IR projection.Código del Trabajo; IESS
Rendered from the canonical facts model. General reference only — confirm with a qualified professional before acting.
Tier 2 — research-verified. Figures sourced from the SRI (Servicio de Rentas Internas), IESS, the Código del Trabajo, PwC Worldwide Tax Summaries, and Ecuadorian payroll references. NOT yet signed off by a licensed Ecuadorian contador. Treat every computation as an estimate pending professional review.
Quick Reference
| Field | Value |
|---|---|
| Country | Republic of Ecuador |
| Currency | USD only (US dollar is legal tender since 2000) |
| Standard pay frequency | Monthly |
| Tax year | Calendar year (1 January -- 31 December) |
| Income-tax withholding | Retención en relación de dependencia — annual projection method (project, apply table, ÷ 12) |
| Income-tax authority | Servicio de Rentas Internas (SRI) |
| Social security | Instituto Ecuatoriano de Seguridad Social (IESS) |
| Key legislation | Ley de Régimen Tributario Interno (LRTI); Código del Trabajo; Ley de Seguridad Social |
| SBU (salario básico unificado), 2025 | USD 470/month (2026: USD 482) |
| Validated by | Pending -- requires sign-off by a licensed Ecuadorian contador |
| Skill version | 0.1 |
IESS contribution rates (IESS Tasas de Aportación (as reported by EcuadorLegalOnline; misalario.ec))
| Contribution | Rate (private sector) |
|---|---|
| Aporte personal (employee) | 9.45% |
| Aporte patronal (employer) | 11.15% |
| Combined reference | 20.60% |
[RESEARCH GAP — the IESS official rate PDF was not machine-readable; the 9.45% / 11.15% rates and the fund-by-fund split (IVM / salud / riesgos / cesantía) rely on secondary sources — reviewer to confirm against the IESS document.]
Annual IR table — 2025 (LRTI art. 36; indexed annually to urban CPI)
| Taxable income from (USD) | up to (USD) | Tax on base | % on excess |
|---|---|---|---|
| 0 | 12,081 | 0 | 0% |
| 12,081 | 15,387 | 0 | 5% |
| 15,387 | 19,978 | 165 | 10% |
| 19,978 | 26,422 | 624 | 12% |
| 26,422 | 34,770 | 1,398 | 15% |
| 34,770 | 46,089 | 2,650 | 20% |
| 46,089 | 61,359 | 4,914 | 25% |
| 61,359 | 81,817 | 8,731 | 30% |
| 81,817 | 108,810 | 14,869 | 35% |
| 108,810 | + | 24,316 | 37% |
The personal-expense rebate (rebaja) reduces the computed tax and is reported by the employee on Form SRI-GP. The worked examples below show tax before the rebate; the rebate lowers the withholding. [RESEARCH GAP — reviewer to apply the current gastos-personales rebate cap by number of cargas familiares.]
Mandatory bonuses & reserve fund (Código del Trabajo; IESS)
| Benefit | Amount | Timing | IESS / IR? |
|---|---|---|---|
| Décimo tercero (13th salary) | 1/12 of remuneration earned 1 Dec–30 Nov | Paid by 24 December (or monthly if elected) | Exempt from both |
| Décimo cuarto (14th salary) | 1 SBU (USD 470 in 2025) | Sierra/Amazonía by 15 Aug; Costa/Insular by 15 Mar | Exempt from both |
| Fondos de reserva | 8.33% of remuneration | From the 13th month of employment; paid monthly to IESS or accrued | Exempt from both |
IESS personal: 9.45% × 470 = USD 44.42 IR projection: (470 × 12) − (44.42 × 12) = 5,640 − 533 = 5,107 < 12,081 → 0% → USD 0.00/month Net pay = 470 − 44.42 = USD 425.58 (plus décimo tercero, décimo cuarto and fondos de reserva accruing separately)
IESS personal: 9.45% × 1,000 = USD 94.50 IR projection: (1,000 × 12) − (94.50 × 12) = 12,000 − 1,134 = 10,866 < 12,081 → 0% → USD 0.00/month Net pay = 1,000 − 94.50 = USD 905.50
IESS personal: 9.45% × 2,500 = USD 236.25 IR projection: (2,500 × 12) − (236.25 × 12) = 30,000 − 2,835 = 27,165; falls in the 26,422–34,770 band → annual tax = 1,398 + 15% × (27,165 − 26,422) = 1,398 + 111.45 = USD 1,509.45 (before the gastos-personales rebate) Monthly withholding = 1,509.45 ÷ 12 = USD 125.79 (before rebate; the rebate lowers it) Net pay (before rebate) = 2,500 − 236.25 − 125.79 = USD 2,137.96 Employer cost: IESS patronal 11.15% × 2,500 = USD 278.75 (plus accruals for décimos and fondos de reserva)
The rol de pagos must show: gross salary and habitual remuneration, IESS aporte personal (9.45%), IR retención, any other authorised deductions, net pay, and the employer-side IESS aporte patronal and benefit accruals. Employees access contribution history via the IESS portal.
Filing & payment obligations
| Obligation | Channel | Deadline |
|---|---|---|
| IESS planilla (aportes) | IESS online system | Within 15 days of month-end |
| IR retención en relación de dependencia | SRI — monthly Formulario 103 | Per the 9th-digit (noveno dígito) calendar |
| Annual employee withholding certificate | SRI Form 107 to each employee | By end of January (following year) |
| Décimo tercero / décimo cuarto reports | Ministerio del Trabajo (SUT) | After each payment deadline |
[RESEARCH GAP — reviewer to confirm current form numbers and the noveno-dígito due dates.]
Common payroll patterns
| Pattern | Classification |
|---|---|
| ROL DE PAGOS, SUELDO, NÓMINA, ABONO SUELDO | Net salary disbursement |
| IESS, APORTE IESS, PLANILLA IESS | IESS remittance (personal + patronal) |
| SRI, RETENCIÓN RENTA, FORM 103 | IR withholding to the SRI |
| DÉCIMO TERCERO, DÉCIMO CUARTO | Mandatory 13th / 14th salaries (exempt) |
| FONDOS DE RESERVA | 8.33% reserve fund (exempt) |
Interaction with other skills
| Scenario | Skill |
|---|---|
| Employee payroll (this skill) | ecuador-payroll.md |
| Self-employed / individual income tax (Formulario 102/102A, RIMPE, gastos personales) | ecuador-income-tax.md |
| Employer & self-employed IESS rates | ecuador-social-contributions.md |
| Ecuador IVA (15%) | ecuador-iva (consumption tax) |
Handoff: the SRI Form 107 (annual withholding certificate) feeds the employee's personal income-tax return (Form 102A) where they have other income or claim the gastos-personales rebate.
This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a licensed contador in Ecuador) before filing or acting upon.
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